TIDMVLS
RNS Number : 4789D
Velocys PLC
07 July 2016
News release
Velocys plc
("Velocys" or "the Company")
7(th) July 2016
Business update
Velocys plc (VLS.L), the company at the forefront of smaller
scale gas-to-liquids (GTL), is pleased to provide an update to
investors. Construction of the ENVIA Energy GTL plant in Oklahoma
City, which will act as the commercial reference plant for Velocys'
technology, is progressing well. All modular process units,
including those incorporating the Velocys reactors, and all other
major packaged equipment skids, including the steam methane
reformer, cooling towers, landfill gas inlet and syngas compression
units have been set in place on site. System integration, piping
and electrical work is ongoing; 140-150 personnel are currently
working on-site. Photographs of progress on-site are available at
www.velocys.com/media_image_library.php.
As previously announced, following the additional equity and
debt funding Velocys made available to ENVIA Energy earlier in the
year, the Company gained a greater influence in the commissioning,
start-up and operations of the plant. Since then, Velocys has been
further-engaged to provide an operability review, commissioning
planning, operating manuals and training for the project. In this
role, Velocys will be supporting the EPC contractor, Ventech, in
leading the commissioning and start-up of the plant.
A secondment agreement has been signed by ENVIA and Velocys for
a team of experienced Velocys operators and engineers to be on-site
serving under the ENVIA Plant Manager during commissioning and
start-up until the end of 2016. The Velocys commissioning team has
commenced its deployment to the Oklahoma City site.
The Velocys subcontract with Ventech for operations,
commissioning and start-up planning and execution and the
secondment agreement with ENVIA will generate a total of over $0.7
million of revenue for the Company in the current financial
year.
The Company continues to progress the opportunities in its
commercial pipeline as outlined in the recent Annual Report. For
example, Red Rock Biofuels, which is developing a
biomass-to-liquids plant using forestry waste as feedstock in
Lakeview, Oregon, USA, continues to make progress on permitting,
financing and offtake agreements. All of the jet fuel that will be
produced by the plant has been contracted to Southwest Airlines and
FedEx.
Additionally, Velocys has completed its part of the engineering
study underway for a project being developed by a national gas
company in Central Asia that is seeking to develop its stranded gas
reserves. Elsewhere, the opportunity with a major fuels player in
the US remains active. Progress continues to be made by the
third-party project developer, and the air permit for the plant has
recently been issued.
In the first half of 2016, the Company carried out further
analysis of the wax market in North America, which confirmed that
the projected plant economics remain attractive for Ashtabula GTL,
the 5,000 barrel per day plant that Velocys has been developing in
Ohio, focused on the production of waxes and other speciality
products. Given the challenges in raising equity for capital
projects of this nature at present and in order to defer costs,
Velocys has put its development of Ashtabula on hold, pending
reassessment as part of the broad review of the strategy of the
business that the Company is currently undertaking.
David Pummell, CEO of Velocys, said:
"The ENVIA plant is the key focus of the team, and excellent
progress is being made. Our increased stake and operational role is
proving very positive for Velocys and its partners; I am pleased
with the team's dedication and expertise and with the progress the
plant is making. On other fronts, multiple opportunities are
progressing towards firm orders. I look forward to updating
shareholders on the ongoing review of strategy and future
developments in due course."
- Ends -
For further information, please contact:
Velocys
David Pummell, CEO +44 1235 841
Susan Robertson, CFO 700
Numis Securities (Nomad and Broker)
Alex Ham - Corporate Broking
Stuart Skinner / Jamie Lillywhite +44 20 7260
- Nominated Adviser 1000
Camarco (financial communications
& PR) +44 20 3757
Billy Clegg / Georgia Mann 4983
Notes to editors
About Velocys
Velocys is the company at the forefront of smaller scale
gas-to-liquids (GTL) that turns natural gas or biomass into premium
products such as diesel, jet fuel, waxes and base oils. Smaller
scale GTL adds value to shale gas and bio-waste, and makes stranded
or flared gas economic - an untapped market of up to 25 million
barrels per day.
Velocys technology, protected by several hundred patents in over
30 countries, is specifically designed for smaller scales,
combining super-active catalysts with intensified reactor systems.
The Company's standardised modular plants are easier to ship and
faster to install, at lower risk, even in the most remote or
challenging locations. Together with world-class partners, Velocys
works flexibly to unlock gas resources of 15,000 to 150,000 mmbtu
per day, allowing more companies to take advantage of more
opportunities.
Velocys plc is listed on the AIM market of the London Stock
Exchange (LSE: VLS). The Company is well capitalised and has a
multi-disciplinary staff of around 100 operating from its
commercial centre in Houston, Texas, USA and technical facilities
near Oxford, UK and Columbus, Ohio, USA. Its commercial reference
plant, which will be located adjacent to Waste Management's East
Oak landfill site, is under construction.
www.velocys.com
Think Smaller(TM). Velocys is changing the way fuels are
made.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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